Which statement describes Target ROAS bidding?

• A. It targets a specific cost per action.
• B. It aims to maximize conversions regardless of revenue.
• C. It focuses on impression share.
• D. It targets a return on ad spend by adjusting bids to achieve a target revenue relative to spend.

Answer: (D)

Target ROAS bidding is an automated, goal-based strategy that aims to maximize conversion value while achieving a specific return on ad spend. It uses historical conversion value data and real-time signals to adjust bids in each auction so the revenue generated relative to spend meets the target ROAS. In practice, the system bids higher for auctions likely to produce valuable conversions and lower for those unlikely to reach the target, even if that means fewer conversions. ROAS equals revenue divided by cost, so a target ROAS sets the desired revenue per dollar spent and the bids are tuned to reach that balance. This differs from targeting a specific cost per action (CPA), which focuses on action cost rather than revenue, or from maximizing conversions without regard to revenue, or from focusing on impression share, which centers on visibility rather than return.